Gold is enjoying a remarkable start to the year. Economists at MUFG Bank analyze the yellow metal’s outlook.
Gold’s structural resilience has further to run
Yet, beyond the likely solidification of Fed cut expectations in the coming weeks and months, it is the structural channels of physical demand for Gold that excites us most, which we view will unlock more than just systematic momentum.
Looking ahead, the potential upside in Gold prices will be closely tied to US real rates and US Dollar moves, as well as persistent strong consumer demand from China and India, alongside central bank purchasers. We view this will offset downward pressures from upside growth surprises and rate cut repricing, and anticipate that any sell-offs to be limited in scale due to a dovish Fed, slowing wage growth, and resilient central bank demand.
Tactically, we would view a sell-off in Gold as a buying opportunity, as we see an environment with elevated risk channels ahead playing into Gold’s hedge qualities.
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
Hot
No comment on record. Start new comment.